1. Menk Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$ 7.15
Direct labor
$ 4.15
Variable manufacturing overhead
$ 2.35
Fixed manufacturing overhead
$ 21,600
Sales commissions
$ 0.50
Variable administrative expense
$ 0.40
Fixed selling andadministrative expense
$ 10,800
Required:
If 5,360 units are sold, what is the variable cost per unit sold?Note: Round “Per unit” answer to 2 decimal places.
If 5,360 units are sold, what is the total amount of variable costs related to the units sold?
If 5,360 units are produced, what is the total amount of manufacturing overhead cost incurred?
2. A merchandiser plans to sell 13,300 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month:
Cost
Cost Formula
Cost of goods sold
$60 per unit sold
Advertising expense
$150,000 per month
Depreciation expense
$70,000 per month
Shipping expense
$100,000 per month + $10 per unit sold
Administrative salaries
$50,000 per month
Sales commissions
5% of sales
Insurance expense
$15,000 per month
What is the total estimated gross margin for next month?
3. Assume the following information:
Direct materials
$ 70,000
Direct labor
$ 37,000
Variable manufacturing overhead
$ 12,000
Fixed manufacturing overhead
25,000
Total manufacturing overhead
$ 37,000
Variable selling expense
$ 15,000
Fixed selling expense
20,000
Total selling expense
$ 35,000
Variable administrative expense
$ 8,000
Fixed administrative expense
12,000
Total administrative expense
$ 20,000
What is the total conversion cost?
4. Assume the following information for a merchandising company:
Net operating income
$ 19,000
Variable selling expenses
$ 25,000
Cost of goods sold
$ 295,000
Fixed administrative expenses
$ 50,000
Fixed selling expenses
$ 40,000
Variable administrative expenses
$ 5,000
What are the company’s sales?
5. If the net operating income is $10,000, the contribution margin is $40,000, and the variable expenses are $31,500, then the sales must be:
